Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet… Read More

Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet in a defensive sector is a powerful way to protect your wealth from market downturns. My favorite defensive sector is consumer staples. Consumers will always spend on necessities like food and beverages regardless of economic conditions. In fact, the sector is up over 10% this year and is poised to continue its solid performance, even as the “Trump trade” starts to unwind.  That’s why I expect these five stocks to be productive investments well into the future.  1. Coca Cola (NYSE: KO) This lynchpin stock in the American economy has suffered lackluster performance recently, with losing 1.5%  over the… Read More

So far, it hasn’t been a very good year for real estate investment trusts (REITs).  However, this isn’t to say these stocks have performed badly as a whole.  So far this year, the Dow Jones Equity REIT Total Return Index is up about 3.8%. Even though it’s less than the return of the market — the S&P 500 index is up more than 13% over the same period — these aren’t the numbers to really complain about. Especially in the context of this market environment. As we move a little more than six months into the year, the U.S. Federal… Read More

So far, it hasn’t been a very good year for real estate investment trusts (REITs).  However, this isn’t to say these stocks have performed badly as a whole.  So far this year, the Dow Jones Equity REIT Total Return Index is up about 3.8%. Even though it’s less than the return of the market — the S&P 500 index is up more than 13% over the same period — these aren’t the numbers to really complain about. Especially in the context of this market environment. As we move a little more than six months into the year, the U.S. Federal Reserve has already hiked interest rates twice — something that many had anticipated would trigger a REIT sell-off.  So, the good news is that the sector and its investors are taking the rate hikes in stride — so far, at least. But bad news is hiding in plain sight. The performance among REIT subsectors has been widely divergent, as the sector’s investors sold off stocks impacted by some of the major economic shifts. I’m talking about the retail business, the big changes that this industry faces, and the subsequent reaction of the market.  According to REIT.com, the weakest two sectors… Read More

I watch insider transactions closely, following the big selling just as much as the buying. The conventional wisdom is that the actions of these investors can tell you when to buy or sell a company. After all, directors and executive management are ALWAYS trading on insider information. Much of the time, scanning through recent Form 4 statements, the SEC document required when insiders buy or sell shares, is a big yawn. It’s either too small an amount to mean anything to the overall ownership or simply the insider adjusting their total wealth held in the company. But every once in… Read More

I watch insider transactions closely, following the big selling just as much as the buying. The conventional wisdom is that the actions of these investors can tell you when to buy or sell a company. After all, directors and executive management are ALWAYS trading on insider information. Much of the time, scanning through recent Form 4 statements, the SEC document required when insiders buy or sell shares, is a big yawn. It’s either too small an amount to mean anything to the overall ownership or simply the insider adjusting their total wealth held in the company. But every once in a while you come across something that makes you sit straight up: An insider with other intentions. Finding these instances gives investors the chance to piggyback on the insider trades before the market catches on. I think I’ve found one of those trades studying the insider buying from one of Wall Street’s most famous, or infamous, takeover kings. He’s turned his ability to turnaround struggling companies into a $12 billion fortune, making him the 36th richest person in America. Now it looks like he’s focused his aim on a company he’s already tried to buy out before. This Top Director… Read More

You ever wonder why some businesses attract new customers in droves, while others have trouble standing out? It’s the same reason why Starbucks (Nasdaq: SBUX) can charge $7 for a cup of coffee, while the diner across the street only gets $2.  The answer lies in brand loyalty and recognition.  Consumers around the world are comfortably acquainted with certain brand names. And that familiarity has been reinforced by billions in advertising dollars. There is a good reason why Lexus has become synonymous with automotive quality, and why we instinctively grab a 12-pack of Corona beer when heading to the beach. Read More

You ever wonder why some businesses attract new customers in droves, while others have trouble standing out? It’s the same reason why Starbucks (Nasdaq: SBUX) can charge $7 for a cup of coffee, while the diner across the street only gets $2.  The answer lies in brand loyalty and recognition.  Consumers around the world are comfortably acquainted with certain brand names. And that familiarity has been reinforced by billions in advertising dollars. There is a good reason why Lexus has become synonymous with automotive quality, and why we instinctively grab a 12-pack of Corona beer when heading to the beach. The Big Mac isn’t the best hamburger around, yet McDonald’s (NYSE: MCD) still sells them by the truckload each day. The golden arches are instantly recognizable in 119 countries worldwide, delivering annual returns of 13.4% to stockholders over the past decade, nearly double the S&P 500.  Entrenched brands also confer pricing power, allowing their owners to pad profit margins by charging higher prices than competitors for similar products. When you walk into a department store and buy a Ralph Lauren (NYSE: RL) shirt, you pay a little extra for that polo label. Ditto for a Hershey (NYSE: HSY) bar over… Read More

If you’re a growth investor, it’s time to get a lot more boring with your portfolio.   Studies have shown that the real secret to beating the market isn’t growth stocks. Contrary to popular belief, the secret to outsized gains lies in dividends.   The respected research firm Ned Davis conducted a study over more than four decades. Their research found that dividend-paying stocks tend to beat the market over the long term and yield far better returns than stocks that don’t pay dividends.   #-ad_banner-#The Ned Davis study showed that stocks in the S&P 500 that didn’t pay dividends… Read More

If you’re a growth investor, it’s time to get a lot more boring with your portfolio.   Studies have shown that the real secret to beating the market isn’t growth stocks. Contrary to popular belief, the secret to outsized gains lies in dividends.   The respected research firm Ned Davis conducted a study over more than four decades. Their research found that dividend-paying stocks tend to beat the market over the long term and yield far better returns than stocks that don’t pay dividends.   #-ad_banner-#The Ned Davis study showed that stocks in the S&P 500 that didn’t pay dividends delivered a 2.5% annual return from 1972 through 2015. That would have turned a $1,000 investment into $2,910 over that timeframe.    By comparison, dividend-paying stocks in the S&P 500 returned 9% annually over the same period — also beating the S&P 500’s 7.4% annual return.    In this scenario, a 9% annual return over this period would have turned a $1,000 investment into $43,850.   This might be discouraging if you’re a young investor that owns all the FANG (Facebook, Apple, Netflix, Google) stocks. But don’t worry, this is a great time to swap out some of those growth… Read More

If baseball great Yogi Berra looked at a 20-year chart of the Nasdaq Composite Index, he might say that it’s “Déjà vu all over again.” To those who lived through the tech bubble, yours truly included, the chart does look eerily foreboding. And always remember that the most dangerous, and expensive, phrase in the English language is “this time it’s different”. At the turn of the century, top internet service provider American Online (AOL), now owned by telecom giant Verizon (NYSE: VZ), had just announced a now ill-fated merger with content trove Time Warner (NYSE: TWX). Recently, online… Read More

If baseball great Yogi Berra looked at a 20-year chart of the Nasdaq Composite Index, he might say that it’s “Déjà vu all over again.” To those who lived through the tech bubble, yours truly included, the chart does look eerily foreboding. And always remember that the most dangerous, and expensive, phrase in the English language is “this time it’s different”. At the turn of the century, top internet service provider American Online (AOL), now owned by telecom giant Verizon (NYSE: VZ), had just announced a now ill-fated merger with content trove Time Warner (NYSE: TWX). Recently, online retailer Amazon (Nasdaq: AMZN) announced it was acquiring grocery chain Whole Foods Market (NYSE: WFM) in its attempt to conquer the world, I guess. But while history may be starting to rhyme as the Nasdaq reaches nosebleed territory, and there is room to argue that the index does need to blow off a little froth, things may not be as treacherous as they may appear. Here are three observations. 1. Inflated Valuations Are Concentrated While the Nasdaq may be hitting all-time highs, the charge is being led by five stocks: Apple (Nasdaq: AAPL), Alphabet (Nasdaq: GOOG), Microsoft (Nasdaq: MSFT),… Read More